10000 baby boomers retired today

10,000 baby boomers retired today. Here’s why AEC firms should care.

With baby boomers retiring at a staggering rate, architecture, engineering and construction (AEC) firms must prepare to transition millennials into leadership roles. Unfortunately, they don’t have much time. According to the Pew Research Center, 10,000 baby boomers turn 65 every day.

Despite this stark reality, few firms have a plan in place. In fact, only 29 percent know who their next generation of leaders will be and how they will integrate them into their workforce.

Download the e-book, “Addressing Generational Handover in the AEC Industry,” to learn more about this challenge.

So, how can you position your firm for successful generational handover? By quickly developing strategies to overcome common roadblocks.

3 ways to ease the burden of generational handover

 

1. Avoid the loss of institutional knowledge

As baby boomers retire, they take their knowledge and relationships — developed over years or even decades — with them. That’s not easily replaced.

In an article on Workforce, Andrew M. Peña, assistant vice president for human resources at New Mexico State University in Las Cruces, shared his thoughts on this challenge. “Having a succession plan for talent is one thing. Having a succession plan for the information workers possess is another,” he said. “And if you haven’t planned for the latter, you’ve got another think coming.”

He went on to explain that, while measuring the exact financial impact of the loss of institutional knowledge is difficult, the “costs manifest in the turnover, recruitment, replacement and training costs that many organizations face.”

To avoid these costs, firms must document the knowledge and relationships that leaders — and indeed all employees — possess so their departure doesn’t hinder future success. Harvard Business Review suggests following these three steps to ensure institutional knowledge remains even after seasoned employees move on:

  1. “Build an explicit strategy for maintaining institutional memory.”
  2. “Identify a few key things that you want every member of your team to know or be able to do.”
  3. “Use technology to create a process by which your team continually captures and curates institutional knowledge — to make it a living and evolving body of useful information that is accessible to people as they come into the organization.”

Put simply, the goal is to develop a strategic process for storing institutional knowledge and use technology to support that process.

For example, hundreds of firms store valuable relationship information that assists in the creation, development and conversion of leads, projects and wins in Cosential — the leading AEC-specific client relationship management (CRM) and proposal automation solution. “There’s so much data that we have. You have to find a place to put it,” said Deborah Boyd, vice president and director of marketing at KCI Technologies. “Cosential is that for us, and we love it.”

2. Embrace technology

In addition to helping your firm retain institutional knowledge, effectively using technology will go a long way toward attracting the best and brightest millennials.

In an article posted by PSMJ, Matt Fann, electrical engineer at DWG Consulting Firms, said, “As the first generation to grow up with the internet, [millennials] embrace technology.”

Studies show he’s right. In fact, more than 90 percent of millennials own smartphones … and they expect the tools they use at work to offer the same level of convenience and access.

Still, AEC firms remain reluctant to invest in innovative new technologies, as noted in this PSMJ article:

“Despite being surrounded by the miracles of technology that drive every other sector of our business world, the design and construction industry remains largely driven by the use of Word processing [and] Excel spreadsheets, while applauding itself for the increasing use of BIM that barely approaches the levels of widespread use in other industries.

“And when millennials, who live in a 100 percent digital world, join an AEC firm, they are often shocked to see how much of the operations and management of their companies are hamstrung by outdated technology — or none at all.”

Firms that make a significant investment in technologies that streamline workflows, promote efficiencies and ultimately drive revenue will have a clear leg up when recruiting millennials — a group that has largely spurned AEC for opportunities in other industries.

3. Embrace a forward-thinking sales strategy

When firms and their clients’ leaders retire, they often take their long-standing relationships with them. This can leave a large hole in their contacts — and the AEC industry is already feeling the effects.

According to Engineering News-Record (ENR), “Baby boomer clients are retiring in droves, taking with them the loyalty to certain architecture, engineering, environmental, consulting or construction firms, and their replacements often have no loyalties, forcing you to ‘start from scratch’ with a long-term client.”

Stephanie Fortner, implementation specialist at Cosential and former AEC business developer and marketer with 25 years’ experience, agreed. “Firms often assume that if they’ve done the last three projects with a client, they’re getting the next one,” she said. “But that’s not always the case anymore.”

While many AEC professionals may find this terrifying to hear, it also presents a unique opportunity — you can position yourself to get a win even if you’re competing against an incumbent firm. But that means taking a proactive approach with the next generation of prospects.

“I think the biggest thing is doing your homework and knowing the client, knowing what their hot-button issues are,” Stephanie explained. “If you’re hungry and you’re looking for a way in, you definitely have a chance. You just have to know whether their biggest concern is price, performance or whatever.”

PSMJ echoed this sentiment in their e-book, “Turning your Doers into Sellers,” which offered the following five suggestions you can use to proactively seek new business during this period of generational handover:

  1. “Identify a class of problems that you are passionate about.”
  2. “Precisely target your desired clients.”
  3. “Learn everything you can about your target.”
  4. “Conduct every client encounter as an experiment.”
  5.  “Analyze what you are doing.”

To more effectively target desired clients and analyze sales activities, as the article suggests, firms must commit to documenting their marketing and business development efforts.

For James Sharp, strategy director at VLK Architects, Cosential empowers that commitment and provides an easy avenue with which to report on and understand business development outcomes.

“Cosential was that mechanism that created the structure for purposeful business development … the record for how we interact,” he explained. “To move up to that next level of growth, you really have to be more systematic when it comes to business development and tracking those relationships.”

Firms, like James’, that take this type of data-driven approach to marketing and business development are more likely to win the favor of clients of any generation and capture that allusive institutional knowledge, all while also generating revenue that makes them more appealing to their own future leaders.

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